Uber has suffered a major setback after Europe’s highest court ruled that the minicab-booking app should abide by the rules governing other transport providers.
The European Court of Justice’s top legal adviser said that Uber is a transportation company and not a digital service as it claimed.
Uber may soon have to follow the same local rules that govern taxi services in European countries.
Although the court’s opinion is not binding, it is usually followed by judges in the court, presenting a new hurdle for Uber to jump, having fought several regulatory battles in many countries and cities. Uber is also currently dealing with internal dispute involving its founder Travis Kalanick, workplace sexism allegations and legal battles against Google’s driverless car technology, which they claim was stolen.
The company said the ruling, if followed through when the final decision is made in late summer, will not affect most of the European cities in which it operates.
"We have seen today’s statement and await the final ruling later this year,” a spokesman said. “Being considered a transportation company would not change the way we are regulated in most EU countries as that is already the situation today.
“It will, however, undermine the much needed reform of outdated laws which prevent millions of Europeans from accessing a reliable ride at the tap of a button.”
In the UK, Uber is licensed just as other private hire vehicles firms unlike in some cities on the mainland where the company has had to stop or change its service. Uber only returned to Berlin and Madrid last year with a licensed service but remains unavailable in Frankfurt and Barcelona.
According to the company, around 120,000 drivers in the EU use Uber, and 7.5 million people.
Uber’s latest problem began with opposition from established taxi groups, with a group of taxi drivers in Barcelona suing it for unfair competition.
Maciej Szpunar, the advocate General said that since Uber controls the price of its services and imposes conditions on its drivers, the company cannot be regarded as a mere intermediary between drivers and passengers.
“In addition, in the context of the composite service offered by the Uber platform, it is undoubtedly transport which is the main supply and which gives the service meaning in economic terms,” he added.